To read the headlines it would seem Emirates Airline has few friends in international aviation.
Threatened by its global success, a well-documented list of critics headed by the Star Alliance members Lufthansa and Air Canada, and the Association of European Airlines, argues that Emirates poses unfair competition.
So far conventional wisdom has been that their governments in Germany and Canada have responded in full support to these flag carriers. But that is only part of the picture.
The economic value of extra air links to a country, in particular to its provinces, is often lost in squabbles between one airline and another. In fact, there is a significant chorus of support from politicians, airports and consumer groups all lobbying for more services for the Dubai carrier to stimulate trade, tourism and investment.
Harald Wolf, the mayor of Berlin, is the latest to voice support.
"The Berlin government was, and is, in favour to open the airport to Emirates and give them the possibilities to have direct flights," Mr Wolf says.
But he adds his regional government is at odds with the federal government: "They are very restrictive. They have had a very strong lobbying from Lufthansa not to strengthen Emirates."
The growth of Emirates is pitting government agencies against each other in an unfolding, internecine struggle. Federal governments and transport ministries want to protect local airline jobs, while tourism and economic development agencies are more interested in introducing competition and developing provincial cities.
Politicians voice support for Emirates at some risk.
"It is not always easy for them, like Berlin's mayor," says Andrew Parker, the senior vice president of international affairs at Emirates. "Lufthansa is likely to call and say, 'remember, we employ thousands of people in your constituency'."
Air Canada views Emirates's ambitions, which entail flying daily to Toronto, Vancouver and Calgary, as an existential threat. So far it has succeeded in winning protection from Transport Canada, which controls aviation policy.
But Emirates's plans are championed by Industry Canada and its federal minister of state for small business and tourism, as well as the mayor of Mississauga, the Greater Toronto Airport Authority, the British Columbia transport minister, Ontario's chair of cabinet, and the Consumers Association of Canada.
Tim Clark, the president of Emirates, noted the diversity of the support in a 2009 speech in Ottawa entitled: "Dubai and Emirates Airline: Canada's premiers, ministers, mayors and business leaders can't all be wrong."
A root cause of the dispute between Emirates and Air Canada, and with Lufthansa, is India. Air Canada would prefer to be left alone to carry the estimated 2,000 travellers a day between Canada and India by dropping them off in Frankfurt, where partner Lufthansa would take them further.
The alternative would be to allow Emirates to carry them through Dubai and on to its much more developed network of Indian destinations. Long-haul, international traffic is key for airlines. It is where they really make money.
Lufthansa needs to protect this feeder traffic from Canada as well as all the travellers from the German hinterland headed for its centre in Frankfurt to fly long-haul.
If Emirates is allowed to fly to more German cities, travellers would be able to fly more directly to the Middle East and Asia without first having to go to Frankfurt.
What is good for Emirates seems to be good for consumers and the overall economy. An Emirates-funded study from Intervistas concluded that with more flights into Canada, 2,800 direct and spin-off jobs would be generated due to the additional 275,000 passengers a year.
Arguments in support of this stimulus have seemed to win out in Australia, which has steadily increased access for the Gulf carriers over the years. Today, Emirates and Etihad Airways operate almost 40,000 seats weekly into Australia. Other successes have followed in France, India and South Africa.
"What you tend to find is that with the success in Australia, it was the commitment of the regions that ultimately cracked Canberra," says Mr Parker. "Victoria and Queensland were the greatest advocates for tourism and exports."
Yet Qantas does not seem to have suffered. "Despite a 50 per cent increase in Gulf airline capacity since 2005, Qantas's international market share is almost identical to its level back then - just under 30 per cent," concludes the Centre for Asia Pacific Aviation.
Meanwhile, airline capacity to Australia's smaller airports "blossomed", it says.
Mr Parker says that although Emirates flies to secondary cities for commercial reasons, these services have become among its most powerful arms of advocacy, helping to persuade federal governments to grant the airline more access.
"Sometimes you know you are on a winning side of an argument," he says. "It just takes time."
igale@thenational.ae
Origin
Dan Brown
Doubleday
Business Insights
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Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Hoopla%3Cbr%3E%3Cstrong%3EDate%20started%3A%20%3C%2Fstrong%3EMarch%202023%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Jacqueline%20Perrottet%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2010%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3EPre-seed%3Cbr%3E%3Cstrong%3EInvestment%20required%3A%3C%2Fstrong%3E%20%24500%2C000%3C%2Fp%3E%0A
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
yallacompare profile
Date of launch: 2014
Founder: Jon Richards, founder and chief executive; Samer Chebab, co-founder and chief operating officer, and Jonathan Rawlings, co-founder and chief financial officer
Based: Media City, Dubai
Sector: Financial services
Size: 120 employees
Investors: 2014: $500,000 in a seed round led by Mulverhill Associates; 2015: $3m in Series A funding led by STC Ventures (managed by Iris Capital), Wamda and Dubai Silicon Oasis Authority; 2019: $8m in Series B funding with the same investors as Series A along with Precinct Partners, Saned and Argo Ventures (the VC arm of multinational insurer Argo Group)
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Company%20Profile
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Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
MATCH INFO
Manchester United 1 (Fernandes pen 2') Tottenham Hotspur 6 (Ndombele 4', Son 7' & 37' Kane (30' & pen 79, Aurier 51')
Man of the match Son Heung-min (Tottenham)
